Monday, December 21, 2009

Moving The Better Buy Project Forward: An Exercise in Change

Originally posted on the Better Buy Blog

After attending the recent Better Buy Project panel this past week, I blogged about my observations and some issues that came up from that conversation.

That lively discussion continued on the GovLoop Acquisition 2.0 community. Although many commentators took different takes, I think we all agreed that one of the central tenets of successfully implementing Gov 2.0 can focus on one principal area: change management.

Like the Better Buy Project and all Gov 2.0 projects, these initiatives are typically undertaken to changing the overall business environment, and the federal procurement process for Acquisition 2.0. Whether trying to improve the requirements definition process, change roles, or define new ways of doing business, and effective Change Management Process is paramount to stress the benefits, demonstrate long-term value, and minimize the resulting impact on current projects.

Implement a Change Management Process in Gov 2.0

Unlike most projects with a typical project manager, I do believe in the need for the extra project leadership via change agents; committed leaders who are willing to take the risks associated with these initiatives and drive them to fruition. Due to the nature of the current environment in Government procurement (e.g. risk-aversion and status-quo mentality), change is a difficult pill to swallow. This mindset is further exacerbated by the perception of disrupting productivity, as the acquisition workforce has been forced to do more with less. Many past improvement initiatives have also not been driven by change agents, and thus go nowhere. In regards to Gov 2.0, many procurement officials feel they do not have the time to bother with yet another program from leadership that only makes one roll their eyes with the perception of no real value or benefit to helping one do their job better, faster, and cheaper; another passing fad. Thus the need for real commitment from the top and the change agents as demonstrated with Better Buy, as the project is showing real value and a commitment to execute.

Successful implementation will rest with Change Management, which is defined as the process of monitoring and controlling change within a project. By managing the implementation of Gov 2.0 initiatives in regards to acquisition, leaders can:

  • Reduce the negative impact on current acquisition projects
  • Identify new issues and risks, and implement lessons learned as a result of changes implemented during execution
  • Ensure that implemented changes do not affect overall desired objectives and outcomes
  • Control cost of implemented changes

Successful Change Process: A Four Step Model

Change Management in itself is a project within a project. It is already being executed at the General Services Administration (GSA), where projects are actively being sought to pilot the inputs from Better Buy users. Nonetheless, implementing and executing on Gov 2.0 initiatives can follow these Change Management steps:

Identify: The first step in the change process is to identify the need for change, which is apparent in federal acquisitions. This is the overall objective of the Better Buy Project, where any member can suggest a change to the process. Some of the discussion at the panel included capturing statistical data of the user community and their input. However, it is the relevancy of the input that is most important. Further, anonymity can be a powerful tool to providing desired input, free from possible managerial reprisals. The Better Buy Project will hopefully serve as a template for capturing input for change, and helping leaders identify needed focus on process improvements and areas to retool business operations. The Securing Americans Value and Efficiency (SAVE) program is another example of real benefit through collaborative processes, although these types of tools should be done with more frequency. Identifying the need to change is driven by value added; describing the change, and identifying drivers, benefits, costs and likely impact of the change on the project, process, or agency.

Review: This is what the Better Buy Project is currently doing in its Phase II, which is to investigate the recommended changes to identify feasibility and impact, both long and short-term. GSA experts are looking for the low-hanging fruit, and those suggestions that can be successful delivered to have the greatest impact with the least disruption. Normally changes which are not critical to project delivery should be avoided whenever possible to prevent "scope creep," but the Web 2.0 construct seemingly turns this project management dictum on its head. Implemented changes will have impact on project delivery, specifically by buying better, faster, cheaper. It is the disruption on current delivery that can not suffer, and why Butter Buy implementation will be so difficult. Finding ways to implement gradual change is preferred, as lessons learned can be studied, reviewed, and implemented with more meaningful impact.  

Approve: Experts have to review the recommended changes and input, as some recommendations are real and others use these forums as an outlet for venting frustration. Nonetheless, it is the naysayers that can also have value on the conversation, as they may point things out that are not always clear to those who are committed and engaged towards success. As discussed at the panel, the suggestions on Better Buy with the greatest number of votes does not necessarily mean ranking, so leaders do need to weigh the value of the input. More importantly, these decisions need to be communicated to the user community, as members should be able to see what input is being considered, and what is not. Ultimately, these decisions should be based on the level of risk, impact, benefits and cost to the overall project or process, and the decision may be to decline, delay or approve the change request. Either way, this level of communication and transparency can go a long way to refining input. More importantly, input will hopefully keep coming as users can see execution is the real end goal, and the initiative is a worthwhile investment of time to participate.

Implement: Here is another way to use collaboration tools with user input. Who knows best on the projects or processes that can be improved than users? Of course members will no doubt vent some more, but that is why input is vetted by experts and leaders to ensure the cream rises to the top. Leadership needs to ensure proper input gets implemented, and also ensure that proper communications strategies are put in place such that changes are scheduled and implemented accordingly. After implementation, leadership, helped with the users, can review the effects of the change on selected  project and processes to ensure that they have achieved the desired outcomes. This in effect creates a change agent community, which helps leadership further communicate outcomes and execute more efficiently. Further, these successful changes then need to be broadly communicated to the overall Gov 2.0 community, to further build bridges and roadmaps for successful implementations across Government.

Throughout a sound Change Management Process, Government leaders can monitor and control changes to selected projects and processes by communicating often, and in turn ensuring that communication is broadcast using the same collaboration tools and keeping track of changes that have been accepted, rejected, or in review. This in effect creates a transparent, up-to-date Change Register.

By completing these steps, Government leaders can carefully monitor and control project and process changes, which in turn increase the likelihood of success. I look forward to further actions by the Better Buy Project, and other initiatives that are leading the way in changing how the Government operates.

Wednesday, December 16, 2009

Better Buy Project Moves Forward

As collaboration tools, Gov 2.0, and other initiatives to encourage transparency and solicit input from stakeholders move forward, a pilot on this front met today to discuss implementing these ideas and creating further momentum via proof of concept.

The Better Buy Project, as I discussed in a previous post, is a collaborative initiative between the General Services Administration (GSA), the American Council for Technology/Industry Advisory Council (ACT-IAC) and the National Academy for Public Administration (NAPA). The initiative is focused on collecting ideas to help shape the future of acquisition, with the ultimate goals of creating an acquisition process that is world-class through a concept of “crowdsourcing.”

Moderating the panel was Chris Dorobek of Federal News Radio, who was jokingly introduced as the Most Interesting Man in the World (I told him I would include in this post, so here it is!). Although I did not actively ask questions, and Chris did a great job moderating and going around the room soliciting input, my primary objective was to get the sense of the questions being asked and the level of awareness of the project. Further, I wanted to hear from the panelists, most notably Mary Davie of GSA, who has spearheaded the initiative through thoughtful and visionary leadership. Some of the issues addressed were interesting for what was discussed, but more so for issues that were left outstanding.

Of course one of the biggest issues to executing Gov 2.0 initiatives are the regulations and policies that need to be addressed to ensure compliance. The group discussed Section 508 and Federal Information Security Management Act or FISMA, in addition to overall security requirements most notably at Defense and raised by resident expert Noel Dickover. However, what remained mostly silent, and what interests me, is getting acquisition leaders interested and engaged. That seems to be one of the biggest obstacles to Gov 2.0; the metrics, the ROI, the impacts on the profession, and that real value can be difficult to measure or remains intangible. Although I think headway is being made on that front, certainly the need to communicate the real value added is vital for this and similar Gov 2.0 initiatives. For the Better Buy Project, and the overall Acquisition 2.0 movement, the message campaign is about buying faster, cheaper, and more effectively. Further, the tools should allow procurement professionals in both Government and industry to exchange meaningful information to create better requirements, facilitate market research, and help create the foundation for successful outcomes up front.

The Better Buy Project needs to do a better job of communicating to the user community what is being done with the ideas that are being posted and voted on, such that people can see that this initiative is for real. Just because an idea has the most votes does not necessarily mean it will get implemented. In fact, some of the ideas that have the most votes and commentary are  due in part because they are out-of-scope, or require more clarification to understand the user’s intent. Along those lines, these initiatives need to get better input from naysayers, those who think these initiatives are fads and meaningless. Their input is just as vital to those who are engaged and actively participating. Only through a holistic approach to soliciting  input can these pilots create the most value to overcome obstacles and come to fruition.

It is the end-state that ultimately matters, and to that end, GSA is actively taking input from Better Buy and looking for ways to implement them. As Chris Hamm, Operations Director of GSA’s Federal Systems Integration and Management Center (FEDSIM), and also a panelist mentioned, this is the hard part. Who is going to take the risk, and possibly the hit, for sticking their neck out to use these unproven tools in a risk-averse environment? What projects and in what state are needed? These are questions that of course need to be answered, but also prime areas for answers by Better Buy users. The collaboration could help GSA figure this out. Further, leadership and change management are again at the forefront of getting to the next step towards execution.

My end-state for federal procurement is to focus on outcomes and needs, and for Government to get out of the requirements writing business. The world-class federal procurement environment would be performance-based, with the focus on buying real best value through innovation, and to allow acquisition professionals to focus on oversight, surveillance, program management, and performance. I am a strong proponent of streamlining and standardization, as the uniqueness of agency missions, and in some cases, different organizations within an agency, is a canard to continuing status quo. I often consult with federal clients who have very commercial-like operations, yet feel they are unique and have to have everything custom built. Granted I am not proposing a one-size-fits-all approach, but looking for ways to streamline and standardize is not such a bad thing, and can go a long way to creating real savings through the elimination of redundancy and waste. These Gov 2.0 tools, and the initiatives like the Better Buy project, can go a long way to making this end-state a reality.

I hope that Better Buy and similar initiatives continue to find ways to engage the acquisition community, because I believe these tools are a badly needed tool for change. Combined with common sense approaches to process improvements, and working in the current environment without further legislation and laws that create confusion and ambiguity, federal procurement can once again be the starting point for successful government management and get the respect and positive attention it deserves.

Monday, December 14, 2009

Becoming Engaged with NCMA Enhances Professionalism and Mission Success

The NCMA recently published an open letter to Government employees on how to become engaged with the NCMA without conflicts of interest or ethical violations. NCMA provides a collection of neutral networks or communities, at the local and national level, where contract management professionals from all types of government and industry agencies and organizations can come together with a common goal: To enhance their professional expertise in a non adversarial environment, thus enabling them to more effectively accomplish the mission of their organizations.

Acquisition professionals are encouraged to read this letter, as many misconceptions can be addressed about government employees getting involved with the association. Only by working together can we help solve the complex problems faced by the government contracting community, and NCMA is at the forefront of leading this change.

Open Letter to Government Employees

Saturday, November 14, 2009

Increasing Competition Means Raising the Bar on Value

As part of the Obama Administration's call for reform of the federal acquisition process, the Office of Management and Budget (OMB) recently issued a second set of memos with guidance on increasing competition for better outcomes. These memos are a continuation of original OMB guidance released in July, which outlined ways to improve acquisition processes, make better use of information related to contractors' past performance, and balance the blended contractor and federal workforce. These initiatives are designed for agencies to achieve a 7 percent cost savings of their baseline contract spending by fiscal 2011, with overall expected savings of $40 billion annually.

In an effort to achieve these goals, OMB guidance states that improved acquisition outcomes through increased competition can be achieved by focusing on requirements and outreach to potential vendors. While this guidance can certainly go a long way to improve acquisition outcomes, OMB has fallen short in providing the specificity agencies need to execute these initiatives. Moreover, OMB also fails to mention one of the fundamental weaknesses in the current state of competition, which is to improve the quality of the vendors competing on federal contracts. OMB falls into the trap of focusing on quantity, which only exacerbates the competition problem by continuing the fixation of focusing on symptoms and not the disease. It does not help the government be a more strategic buyer nor promote innovation.

Many firms that offer innovative solutions are often brushed aside by the archaic decisions by agencies that award contract vehicles acting as gate keepers for who can compete on federal contracts. These processes are designed to treat all firms the same, but therein lies the problem. By restructuring these processes, improvements in competition quality can be realized, as the government can review the experience of firms and what they bring to the government in their totality. If higher quality businesses could qualify for such contracting vehicles and opportunities to compete, value could increase and costs could decrease.

The guidance also fails to provide clear instruction on collaboration, where real opportunities exist to leverage tools and technologies to exchange information with industry and improve knowledge transfer. The ability to leverage Acquisition 2.0 methods, as piloted in the Better Buy Project, demonstrates the potential of these initiatives that can and should be rolled out government-wide in an effort to standardize and improve how the government buys. These collaboration tools can help execute on the OMB guidance, which is to better understand the market, improve requirements development, and create opportunities for increased competition. This will ultimately set the stage for creating a performance-based acquisition construct and allow for a focused approach on oversight and accountability. Acquisition leaders who view these tools and techniques as unrealistic or time-wasters are not only missing out on real opportunities, but also possibly preventing the transformation of the acquisition process into a world-class, 21st century buying organization that these tools could help realize.

Only through the improved caliber of the supplier base can increased competition and quality be achieved, and it is the responsibility of government leaders to not only provide guidance, but the tools and techniques agencies need to accomplish the President's goals for improving acquisition outcomes.

Tuesday, November 3, 2009

Acquisition Reform Should Include Protest Actions

Recent reporting by Federal Computer Week (FCW) highlights an issue that is not being addressed by acquisition reform initiatives; reforming the contract protest process.

Writing in the Editor’s Notebook blog at Washington Technology, Nick Wakeman discusses the protest by Unisys and General Dynamics of TSA’s contract award to Computer Sciences Corp for the agencies information technology infrastructure.

According to FCW:

…the number of protests filed with the Government Accountability Office jumped 17 percent between fiscal 2007 and 2008, according to a December 2008 report. Part of that can be attributed to an increase in GAO’s jurisdiction. But even if you take that out, Wakeman notes, that still leaves a jump of 10.9 percent, which followed an increase of 6 percent the year before. In contrast, the number of protests had declined 2 and 9 percent in the preceding years…

I see three fundamental issues at play here that need to be addressed regarding this rise in protests:

1) Business Strategy

With such large awards like the TSA contract seemingly the norm for information technology, many companies cannot afford to not have the business. These contract wins are often built into the bottom line profit projections, so protests are a vehicle to open competition, or even go on fishing expeditions in hopes of finding errors in process that can sustain a protest. Further, there is now an understanding in the market that protests are almost a given for these large acquisitions, therefore companies competing for opportunities are creating internal process teams as part of proposal centers to execute protest actions as part of capture management.

Also reported by FCW earlier this year was a piece by Robert J. Guerra, a partner at consulting firm Guerra and Kiviat, who was horrified to receive an e-mail advertising a seminar titled “A Successful Bid Protest Can Produce a Contract Win.”

…“It is appalling that in a time when government acquisition personnel are under increased stress to conduct ever more complex acquisitions, we as a community should seek ways to protest more contract awards,” Guerra wrote in a Federal Computer Week column. “It isn’t bad enough that we already have protests that in many cases are ‘fishing expeditions.’ Now we want sales reps and managers pursuing protests as a way to make their quotas.”…

I also wrote about this phenomenon in a piece for Defense AT&L magazine, as the increase in protests is a sign that more companies are competing against one another for smaller shares of a shrinking market for multibillion-dollar projects. As a result of poor source-selection practices and award decisions, the government has opened the door for the opportunities to protest. Industry is simply taking advantage.

2) Acquisition Workforce

I do not think anyone is under any illusions that workforce issues are a common denominator for many acquisition problems, and protests are no different. There has been a significant decline in solicitation quality, with the subsequent rise in the number of mistakes or lack of adherence to policy and regulations being committed by personnel conducting source selections. Further, these issues have been exacerbated by poor leadership that allows this to happen.

This goes back to a constant theme of mine that the skills of the acquisition workforce need to be restructured to encompass the life cycle of contract management, to include requirements development, contracting, and program management. Business advisors, and well-trained ones at that, are what the workforce should be, combined with having the technology and tools to increase productivity and quality. Mistakes often happen because source selections are often conducted by disinterested parties with little to no background in contracting, the requirement, or training on process. Again it is not a focus on numbers, although obviously a larger workforce is needed, but also the quality and caliber of new hires that bring business management skills to the table. Knowledge transfer is also vital from the experienced contract managers for success on this front, to help reduce mistakes and errors that are easily corrected, and shut the door to protest opportunities.

3) Accountability

It seems that there was a time when companies that protested contract after contract received a reputation for being troublemakers, or unethical. Further, these companies were often shunned by industry as well for poor management and toxic reputation. Those days are now gone.

The fact of the matter is that there are little to no consequences for companies to protest, whether it is for one contract or many. This needs to change. Although I am not advocating for industry to lose the right to protest, there does need to be a balance of accountability to the taxpayers. The way the system is structured now, firms can protest at will without having to reimburse the Government if they lose, or reimburse the Government for damages, lost time, and expenses for defending the protest. Further, firms that often protest are no longer treated with any animosity, as it is just business as usual. Under these circumstances, what does a company have to lose? Very little. In fact, the current system encourages companies to protest since there are no consequences for being wrong, or filing what can be viewed as a “frivolous lawsuit.”

There needs to be punitive consequences for firms that protest. Certainly if protests get upheld, that is one thing. But firms that habitually protest and lose must be held accountable for the lost time and costs of defending the protest to the program. Further, firms that lose a certain number of protests in a given period should also be held accountable, such as being barred from competition for a set period of time.

I disagree with a statement submitted to Congress by GAO General Counsel Gary Kepplinger:

…Well-meaning attempts to ward off such protests “may have, on balance, the unintended consequence of harming the federal procurement system by discouraging participation in federal contracting and, in turn, limiting competition.”…

I believe these measures would actually help improve the quality of vendors who compete, as companies that waste taxpayer money will think twice before filing protests without actual justification. Only when firms are held accountable for their actions will we see real change. This is contract management and acquisition reform 101.

Although protests are not going away anytime soon, I feel that the current system needs to be relooked, as we cannot afford a process that allows industry to protest with impunity, bully and intimidate contracting officials, and waste taxpayer funds. A balance is needed, and badly overdue.

Sunday, October 25, 2009

Lessons Learned From Rapid Acquisition of the MRAP

There has been some discussion recently on a case study of shortening the procurement cycle from the lessons learned of the Mine Resistant Ambush Protected (MRAP) vehicle. The MRAP is an armored all-terrain vehicle whose purchase and desire for rapid deployment was motivated by the continuing deaths of troops in Iraq and Afghanistan resulting from improvised explosive devices or IEDs. At the time of the purchase in 2007, the Department of Defense (DoD) goal was a rapid acquisition to get the MRAP vehicles into theatre as quickly as possible, but soon became a case study in improving strategies on how the DoD can make future rapid acquisitions for faster deployment. Although the Government Accountability Office report on the MRAP focuses on the specifics techniques for why the MRAP was successful, four tactics in particular were mentioned in Congressional testimony and the report that should be the foundation for other procurements:

Agree on a plan and stick to it. At the start of a rapid acquisition, officials must assess the immediate need and determine minimum requirements for the project, said Thomas Dee, director of the Joint Rapid Acquisition Cell at the Office of the Undersecretary of Defense for Acquisition, Technology and Logistics…

This may seem straightforward, but it can be an exercise in frustration by focusing on symptoms of the disease and not the disease itself. The evolution of the MRAP design was successful in part by recognizing that no idea should be invalidated during brainstorming; a key factor in requirements development for rapid acquisitions. Further, rapid acquisitions are most successful with the implementation of information sharing and collaboration; another prime candidate for Web 2.0 tools for an Acquisition 2.0 construct.

Stay with the familiar. At the outset of the MRAP program, DOD officials decided to use only proven technologies instead of testing new ones. They also kept requirements to a minimum with a strict policy of senior-level approval for any changes…

The only way that technology implementations can be successful in general, and certainly with rapid acquisitions, is to baseline requirements and use mature technologies. Baselined requirements form the basis for all work performed on the project for which it was developed, and identifies expected capabilities. It further allows the focus to be on those capabilities agreed upon in the requirements development process, moving the project forward towards the expected capability.

Here is where one of the fundamental breakdowns occurs in technology projects across government; the inability to define requirements combined with the desire to use immature technologies (i.e. Future Combat Systems). By leveraging Web 2.0 technologies and ensuring critical stakeholders are involved in the process, defined requirements can be identified and requirements creep can be eliminated.

Require bidders to show their work. DOD’s competition was full and open, but only road-ready contractors made the first cut. That is because DOD officials required vendors to bring in their vehicles and demonstrate their solutions, which weeded out the companies that had only plans, Brogan said…

Competitive prototyping is one of the most important tools for rapid acquisition, since it requires firms to show actual capability and not just plans or a roadmap on how they expect to get there in the future. This technique was mandated by former Under Secretary of Defense, Acquisition & Technology John Young in 2007. In his memo, Sec. Young points to the main culprit in how the DoD procures systems, which is to rely on proposals on paper that provide inadequate visibility into technical risk and a weak foundation for estimating development and production costs.

Relieve vendors of some of the work, if possible. Officials made the government responsible for adding the final pieces of equipment, such as radios, to the vehicles after they were bought rather than putting those tasks on the contractor’s to-do list. That shortcut helped get the vehicles to the battlefield more quickly, said Michael Sullivan, director of acquisition and sourcing management at the Government Accountability Office...

This goes to the 80 percent solution, in which case the baselined requirements provide the maximum capability possible for rapid acquisition and implementation. This way, the incremental capability can be improved from the baseline through feedback and full end-user input. In the case of MRAP procurement, this approach saved lives, and continues to protect troops as improvements are made to the vehicle through this process.

Lastly, the documentation process can also be a hindrance to rapid acquisition. Therefore, processes outside the DoD 5000 process were developed to help speed up reviews and approvals such as the Joint Rapid Acquisition Cell (JRACs) process. However, I think see the future of rapid acquisition through further streamlined processes such as the Business Capability Lifecycle (BCL) process, which is the preferred method of technology insertion and uses best practices in governance and risk management. Again it is the Web 2.0 collaboration tools that can help further streamline processes and reduce cycle time, which will lead to improved response time, lower costs, and more rapid fielding of critical technologies.

Although the MRAP program was greatly helped through its DX designation (and thus declare its acquisition DOD’s highest priority to allow access to more critical materials than was otherwise available), it is the four critical points of the program that can be transferred to other acquisitions. Namely keeping the requirements simple, clear, and flexible, in addition to using mature technologies, are the critical success factors that should be implemented with all procurements to see better results and positive outcomes.

Sunday, October 4, 2009

Ideas to Improve Federal Acquisition and the Better Buy Project

This week saw the launch of the Better Buy Project, a joint project of the National Academy of Public Administration and the American Council for Technology-Industry Advisory Council in conjunction with the General Services Administration. According to the website: …The acquisition process represents one of the most important areas of collaboration between government and the private sector.

Unfortunately, it is also among the most complex and least transparent. The Better Buy Project is an experiment dedicated to the belief that there's a lot of room for improvement in the way government buys products and services. We're testing this hypothesis by asking for your ideas on how to make acquisition process more open, transparent and collaborative.

The best part of this project is that the U.S. General Services Administration (GSA) GSA would really like to adopt some of your best ideas. Promising ideas will be selected by GSA to be piloted on an upcoming acquisition, where lessons learned will be captured for future implementation. But that really depends on us, and the ideas we're able to produce…

To that end, I certainly will be actively involved in adding my opinions and ideas to improving the process. To improve my ideas, one of the best leaders in common-sense approaches to the federal acquisition process, Steve Kelman, wrote a blog post that discusses some of the issues I have had and will refine, in addition to some others that are worth considering. Here are five of his suggestions that deserve more attention than they are getting, with my comments and ideas for further improvement.

1. Make past-performance evaluations more meaningful.

I have stated on several occasions (here and here) that past performance needs be one of the most important, if not the most important factor in evaluations during source selection. However, improved contract management strategies are needed through training and leadership to ensure contractors are evaluated and rated in a fair and timely manner. One of the issues with documenting past performance is undue influence by contractors, who have a lengthy and cumbersome process to challenge reviews they do not like or agree with. I absolutely agree with Dr. Kelman that the Federal Acquisition Regulation (FAR) language should be eliminated that allows a contractor that doesn’t like the evaluation to appeal to a higher level. Government officials should have the flexibility and the authority to evaluate performance, and just let contractors critique the review in the file. The onus should be on the contractor to refute the bad review, and not be allowed endless appeals in an effort to ensure a review is in line with industry demands.

2. Reward vendors for suggesting cost-saving ideas.

This is one the fundamental principles of using Web 2.0 technologies to exchange information between the Government and industry. Although the FAR encourages the exchange of information with industry during pre-contract award phases, contract personnel often view this activity as undue influence or not to be encouraged. Instead, the Government continues to push unrealistic and poorly planned solicitations without thorough vetting of requirements. The ideal environment for the Government is one where collaboration tools are leveraged to effectively share knowledge about requirements during the pre-solicitation phase, where these participatory exchanges can be used to evaluate who will provide the best savings to the Government. Further, these exchanges and collaborative environment can also help transition into a performance-based contracting atmosphere where the Government can get out of the requirements development business all together and focus on needs, objectives, and mission.

3. Revive share-in-saving (SIS) contracting.

This technique works by paying the contractor, all or in part, based on the savings it generates through the contract. According to Dr. Kelman, he was not fond of what he called a “vicious defamation campaign by the Project on Government Oversight — whose officials would rather have a contract fail than see a vendor make a profit — and benign neglect (at best) from the Bush administration.” Although Dr. Kelman does not elaborate, I was not encouraged with the few attempts at SIS across Government.

In theory, this contracting method is not new or particularly innovative, but certainly a best practice of world-class procurement. My issue with this technique is what is needed to be successful; clearly specified outcomes (e.g. generating savings by eliminating inefficient business practices, conservation measures, identifying new revenue centers, etc.), clearly defined incentives and performance measures, and commitment from top management and leadership. These precursors have been an Achilles heel of Government and the acquisition community for various reasons (i.e. workforce numbers and quality, training, etc.). I believe step one is shoring up the acquisition workforce, train them, ensure the capabilities are present to execute these initiatives, and then move forward on process improvement and instituting best practice techniques in parallel to see real changes and improvements.

4. Use contests as a procurement technique.

This item is similar to competitive prototyping at Defense, and another best-in-class technique to help defray the expensive costs of large procurements, properly manage and transfer risks, and improve technological maturity for better investment decisions. The Government cannot continue to dump millions, and in some cases billions, into unproven technologies without defined requirements without clear, accurate, and realistic cost, schedule, and performance outcomes (e.g. Future Combat Systems).

5. Make successful contract management experience a promotion criterion for program officials.

Accountability needs to be the name of the game for successful outcomes. This has to come down from leadership, and to make contracting a strategic imperative for successful Government operations. Contracting touches most of operations, and needs to have the attention and investment in resources needed to fix the process, save money, and bring the acquisition workforce back to the center stage of being important players in the process of Government management. Because accountability seems to be a foreign concept, in addition to simply not having enough bodies, personnel who are not qualified are promoted and continue to experience problems managing contracts. I have often written about the need to focus on skills and capabilities in rebuilding the workforce upfront, but accountability needs to be front and center at the backend as well.

I look forward to further input by senior leaders’ such as Dr. Kelman into helping shape the direction into improving the acquisition process, in addition to the evolution of the Better Buy Project and implementation of the suggestion and ideas from this initiative. These programs will go a long way towards improving how the Government buys and manage its resources.

Thursday, October 1, 2009

With New Fiscal Year Comes New OMB Guidance

As Fiscal Year (FY) 2010 is now underway, The Office of Management and Budget (OMB) will be ramping up its guidance on improving acquisition outcomes, which includes a broad section of areas to include competition, contract types, workforce, outsourcing, and acquisition practices. I will be covering theses issues in more depth as they are rolled out, but wanted to set the table for the upcoming guidance by reviewing past recommendations and improvement actions. The first of two steps of pointed guidance for contracting cost savings came from the OMB memo late summer, outlining existing contracts and acquisition practices. I will therefore review these two subjects, as the guidance from OMB in their memo left many in industry flat for the lack of details, and many in Government with the lack of direction that they desperately need and were hoping to obtain from leadership. My take is that the memo created a scenario of asking for short-term objectives with long-term guidance, creating somewhat of a mixed message structure and raising more questions than were answered.

In the July memo, OMB has asked agencies for a 7% contract spending reduction in FY 2010 and 2011, with the overall goal of $40 billion a year in net savings through better acquisition management and contract practices. Immediately, in my mind anyway, the questions raised and not addressed are how did the Administration come up with the figures? What analysis was done? Where is the transparency? Also, what investments in resources are needed to realize these savings? The logical solution is to make agencies accountable for reshaping their acquisition processes and refining their strategic plans to meet these objectives. However, many organizations find themselves in the unenviable position of either not having a plan, having poorly written plans, or more importantly, not having the resources and commitments from leadership to perform this important function. Most acquisition offices that I know and have spoken with would love nothing more to perform these important strategic activities, but the reality is that they are severely stretched thin, in both personnel and resources, with procurement velocity the only activity that can and must occur. Acquisition has to first become a strategic imperative at an organization; to be folded into the performance goals that are also being rolled out by OMB. First thing is first, and I think this dichotomy will cause more problems than it solves.

Since procurement as a strategic activity is a difficult if not foreign concept in the current acquisition process, many of the recommendations made by OMB will fall on deaf ears unless strong, active leadership executes on these initiatives. Let’s take a look at the recommendations as they were made by OMB one-by-one:

(1) Ending contracts that do not meet program needs or projects that are no longer needed

Does this also mean that Congress will stop funding pet-projects in their home districts; the ignominious and omnipresent earmarks or “pork barrel” projects? Doubtful, since Congress is under enormous pressure from an army of government contractor lobbyists and re-election always on the horizon. Further, my hope is that agencies do not take the “termination” guidance as a mandate, since the victims of those activities will more than likely be easy targets with little inclination and resources to fight back; small businesses. A thorough analysis of contract activities, return on investment, termination costs, and other similar variables will need to be analyzed through a prism of contract, budgeting, and program management; critical skills that are in short supply across Government.

(2) Building the skills of the acquisition workforce and recruiting new talent so as to negotiate more favorably priced contracts and manage contract costs more effectively

This is a long-term goal, and the most important one as the common denominator breakdown in the acquisition process; the lack of sufficiently, trained personnel. Government wide initiatives are already under way to shore up numbers, but I have yet to see coherent, strategic plans to build capability and skills, a much more important objective than numbers alone. I do know the Office of Federal Procurement Policy (OFPP) is working with agencies to develop these plans, but also believe the lack of an Administrator is hurting the efforts, with significant weaknesses in communicating these strategies and helping shape the policies and guidance that will help to alleviate workforce personnel issues. I hope that the nomination of Daniel Gordon, who has served as acting general counsel at the Government Accountability Office since 2006, gets expedited, as he is desperately needed. Nonetheless, I do not believe workforce issues will be a short-term activity to help realize the cost savings objectives, as the hiring process is too slow, and the training too substantial and lengthy for new acquisition personnel to have immediate impacts on the process. Changing that paradigm is another topic altogether, and does merit further discussion.

(3) Developing more strategic acquisition approaches to leverage buying power and achieve best value for the taxpayer

No question leveraging buying power is an important activity that needs to be properly planned and executed to see real savings. I believe this initiative is one the most value-added activities that needs to be a primary focus across Government to meet cost savings goals outlined by the OMB in the next 24 months. The issue here is a coherent strategic communication strategy, across multiple agencies and across multiple organizations so that the left hand knows what the right hand is buying, but also knows how they are buying, and why. The simple answer here is that working groups across Government need to continue working through these issues, conduct a thorough spend analyses, and eliminate redundancy to save on contract costs by increasing efficiency, cutting wasteful and redundant contract vehicles, and only purchasing from trusted vendors that offer the desired discounts and have a track record of meeting cost, schedule, and performance goals. Elimination of waste at buying centers saves on contract and administration costs, and could be done relativity quickly without the need of legislation. This is simply a good business practice, and is being conducted by commercial firms as a primary strategic imperative to save money and lower costs.

(4) Increasing the use of technology to improve contract management

I do not think there is an argument or question here about how technological innovations has drastically improved productivity and helped lower costs. However, the issue here is what technologies need investment as they pertain to reducing contract management costs. I believe the answer lies in the potential of Web 2.0 (or Gov 2.0). The power of Web 2.0 strategies is the improved exchange of information, which is critical and at the heart of improving transparency, quality, and accountability, all themes shared by the Obama Administration. Further the use of Web 2.0 technology can help improve communication and knowledge transfer between stakeholders, having a dual effect of increasing quality, and lowering costs. These tools can be very helpful during pre-contract award, where Government and industry can communicate on needs, build solid requirements, properly plan and budget, and create realistic cost, schedule, and performance objectives with corresponding metrics for successful administration and oversight. The impacts on long-term performance and lowering contract costs could be impressive and significant, but also timely.

(5) Reengineering ineffective business processes and practices to reduce cost to spend

Another important concept is improving the processes of acquisition, which I also see as long-term goal requiring short-term planning to see real change and reduce costs. One the best methodologies to accomplish this goal is Lean Six Sigma, where improvements are done in a structured, project format. This methodology follows a prescribed mandate and structure, which would be the reduction in contracting costs, and ensures that important issues are analyzed using a sound and consistent methodology. The beauty of Lean Six Sigma is that this methodology can avoid the pitfalls common to efforts that address symptoms of a bad process, rather than causes, of problems and enforce the use of data in decision making.

What is further important about this methodology is the consistency of how the processes are analyzed; which helps effectiveness of the process improvement project teams and allows for the sharing of project results across the organization. Using this methodology, along with Web 2.0 tools for knowledge sharing and information flow, also helps apply a disciplined approach to configuration management and feedback mechanisms to ensure that project team recommendations are implemented and tracked. Again this initiative is dead in the water without active commitment from leadership, which requires hands-on participation and creating a culture that actively supports process improvement. Further, leaders need to be change agents, and help and drive the message that change is good and can help complete the mission in a more effective, less costly manner.

The amount of work that needs to be done to create a world-class procurement process in Government is a long-term objective, but has been also put into a short-term bucket with cost savings targets that will be taken as a mandate by agencies. As we move into FY 2010, I look forward to continuing to see leadership in action, and change for the better.

Monday, September 28, 2009

Capturing Past Performance Data is Not Enough

As acquisition reform continues to gain steam, the Office of Management and Budget and the Office of Federal Procurement Policy are continuing to craft guidance and procedures to improve the acquisition process in hopes of saving money on contract costs and reduce the use of “high-risk” contract types. These improvements will no doubt create positive impacts on long-term acquisition outcomes, but it is the short-term and current processes that can and must be improved. Specifically, it is past performance data on procurement actions that can have a deep and lasting impact today on how the government does business and awards contracts today.

To this end, a new past performance database is being developed to capture and use the data on how contractors performed to award contracts. This new system, the Federal Awardee Performance and Integrity Information System (FAPIIS), will integrate a handful of other databases (Excluded Parties List System and Past Performance Information Retrieval System or PPIRS, and the Contractor Performance Assessment Reporting System).

Further mandates to use past performance data were mandated earlier this year in a final rule published in the Federal Register. According to the rule, contracting officers are required to use PPIRS to document the past performance of firms winning awards off the General Services Administration's Multiple Award Schedule and for task or delivery orders placed against government-wide acquisition contracts.

Although the use of past performance is regarded by many in and out of Government to be one of the most important factors that should be used to award contracts, its use is sporadic at best and often not consistent across either agencies or organizations inside agencies. The Government Accountability Office (GAO) reported that the PPIRS system only had a "minimal" number of performance reports for orders placed against the GSA schedules. Further, other GAO reports found that Agencies are often reluctant to rely on PPIRS data because of perceived skepticism about the reliability of the information and difficulty assessing the relevance of such data to a specific contract. As I have also commented (here), technical and cost data should not be at the heart of source selections, but often is the only relevant data used to make award decisions. I believe this is the wrong approach to awarding contracts, and should be addressed immediately without the need for legislation.

For the FAPIIS initiative too be successful, several things have to happen; integration, data standardization, and holding all contracting officers and programs accountable for ensuring past performance data is entered into the new system correctly, accurately, an timely. Past performance data needs to be standardized across government, and all federal agencies should be using one system. One of the main issues with the poor data quality is that many agencies, and departments and organizations within an agency, are using different forms and systems, thus creating an unreliable maze of stove-piped systems and that are not trusted and add little value for their use. Acquisition leaders should also make using a standardized system a high priority, and hold those accountable for its implementation and the quality of the data.

Another issue with the shoddy data, or lack of reporting, is the pressure applied by industry on the reports and the lack of proper oversight and contract management skills in the acquisition community. With standardization in how past performance data is collected and reported, coupled with having the subsequent skills by government to report on performance, fair and effective past performance data could now be realized and disseminated across Government. Industry would still have the opportunity to challenge adverse reviews, but at least the review would be fair and defendable. I think that is not the case currently, and the contracting community feels they do not have the time and inclination to challenge industry, or possibly bring to light poor management by the Government. It is easier to just not update PPIRS, since accountability is currently not enforced or even an issue.

I think my view was brought to light in the current account of continued issues with the Defense Contract Audit Agency, during a billing system review of one of the largest contractors in Iraq. According to the GAO investigators, an auditor stated he did not perform detailed tests (paralleling why past performance data was not updated), "because the contractor would not appreciate it." Since when are government operations dictated by offending contractors?

Like many issues involving poor acquisition outcomes, leadership is crucial to turning the corner on poor performance. I hope that the push to integrate past performance data will be a positive step to hold contractors and programs accountable for execution and adhering to cost, schedule, and performance objectives.

Thursday, September 24, 2009

Hitting a Home Run; Baseball and the Acquisition Process

An interesting post by Bill Gormley of Washington Management Group described parallels on two of my passions, baseball and improving the acquisition process. It is an interesting read and a fun way of discussing what can be a somewhat difficult process and subject. Some specifics points he makes and my take:

…Normally, an organization’s name change doesn’t affect employees. But because Congress changed the committee’s name and is seemingly focusing its efforts on oversight instead of reform, it has cast a cloud of doubt over the entire league.

Given the intensified focus on oversight, agency leaders are now leery of voicing their support of a contracting officer’s decisions. That would be like team owners not supporting their managers’ decisions. That’s not good baseball, and it’s not good business…

Several legislative pieces do attempt to focus on reform, such as hiring authority, help the glacial hiring pace, and the Weapon Systems Acquisition Reform Act of 2009 at Defense. Further reform initiatives are undoubtedly on the horizon, with the Office of Management and Budget and Office of Federal Procurement Policy finding ways to trim acquisition costs and improve the procurement process. Nonetheless, finding ways to improve oversight and hold programs and contracting officials accountable is not a bad thing.

…This cloud of doubt goes even higher, to the “replay officials” — the inspectors general and Government Accountability Office. What will these entities do if an agency leader makes a decision they feel is questionable? The focus on oversight has led to more incidents of decision reviews — or instant replays.

The umps “call 'em as they see 'em,” but they can only see some of what has happened. It’s as if the video on an instant replay cut off just as a line drive was nearing the foul pole. Was the hit fair or foul? It’s tough to say when you can only see where the ball landed…

With report after report of waste, fraud, and abuse and no end in sight, the acquisition mission is finally coming into focus as a major issue that needs the attention it so desperately warrants. Acquisition outcomes must be improved, and it is the reasons and decisions that created the mess we are in that deserve carefully scrutiny to improve and create lessons learned for future successes.

…Let’s be clear here: No one is promoting bad acquisition planning. Those on the field try to make good calls — and usually do. Everyone wants a clean and well-played game. The point is that many of the acquisition-focused decision-makers do not have the support they need from their superiors. And Congress has slowed down the acquisition community at a time when the clear signal from the paid attendees — taxpayers — is for government to speed up the process…

The acquisition community needs a strong, focused, and strategic injection of resources to ramp up capability and skills to complete the mission and create a world-class procurement process that always seeks to improve and save money. However, slowing down the process may not be such a bad thing. Throwing good money after bad is not a responsible solution, but happens every day as an overwhelmed acquisition workforce is continually asked to do more and constantly increase procurement velocity (e.g. Recovery awards). Sometimes taking a step back to do things right is a viable option, similar to the analogy of measuring twice and cutting once.

Strategic and thorough acquisition planning is the key to success, and should be done for long-term outcomes. Mountains of data, physicals, and evaluations of long-term performance are done on baseball prospects before sinking millions into a contract. Many procurements, to the tunes of millions, are done through hastily planned sole-source contracts without any price evaluations or consideration of past performance. Although speed in baseball can make a huge impact on the outcome of a game and season (i.e. Game 4 of the 2004 ALCS; which still gives me heartburn thinking about it), in the acquisition process it can be a disaster.

Mr. Gormley’s conclusion, however, is right on point:

…Give the agencies the authority to elevate the acquisition community to professional status. Give them the tools to hire, train and keep training. Remove the oversight fear factor of making a bad decision. Yes, Congress, continue your overall responsibilities of oversight, just let the professionals carry out their assignments…

The acquisition workforce must be rebuilt and trained so it is a professional, business advisory community that includes the skills and capabilities of acquisition life-cycle management. More regulations are not the answer; it is allowing the community to do its job that is needed. Guidance on contract types and what contract activities will be frowned upon by well-meaning but ill-informed legislators, in addition to always being fearful of being second guessed, have created a risk-averse environment that is having difficulties attracting talent. Much like New York Yankees owner George Steinbrenner always second guessing Billy Martin created an environment known as the “Bronx Zoo” in the 1970’s, so too has a destructive environment been created that needs a healthy dose of resources to improve and see positive outcomes on how the Government buys, and also how those purchases are conducted.